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What is the interest revenue recorded by Nelson Inc. if they accept a $100,000 note at 8%? Use the following data.



Date of Acceptance: April 1, 2012.
Date of Receiving: March 31, 2013.

A. $8000
B. $0
C. $6000
D. $2000

This question is part of Financial Accounting Exam II, Chapters 5 & 6
Asked by Stephens, Last updated: Feb 18, 2020

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2 Answers

c.Dorothy

C.Dorothy

Answered Apr 18, 2018

The interest revenue off this $100,000 should be $8,000. This is actually fairly easy calculation. First, you divide $100,000 by .08. This gives you $8,000. That is literally all you need to do to find the interest revenue for the year this has been in this particular company’s hold. If the question had asked for a more complex answer, it should have asked for the interest revenue after something like a year and a half or something like that.

However, this is just the math done by a person who doesn’t usually do the math. The answer could actually be $2000, but I simply wouldn’t know how to get that answer. Even after all my research, math makes no sense.

 

stephens

Stephens

Answered Oct 17, 2017

$2000
 

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